LinkedIn (LNKD) will be announcing its earnings after the closing on Thursday, August 1, 2013. Dr. T. Allen of Seekingalpha shared his thoughts on the expected-vs.-actual scenario of LNKD.
In terms of earnings, LNKD seemed to share many characteristics of Google and Seagate Technology. Dr. Allen especially noted how similar these three companies were in in terms of price activity. In a graph, Dr. Allen showed that in actual earnings for the first quarter of 2013 surpassed the estimates. Actual earnings were US$0.45, while estimates were only US$0.05. The quarter prior to that, expected earnings were US$0.01, while actual earnings were US$0.35. In the second and third quarters of 2012, expected earnings were US$0.05; however, actual earnings were US$0.16 and US$0.22, respectively.
As such, Dr. Allen noted, "The company seems to surpass estimates every quarter by a huge margin." However, he added, "In retrospect, estimates seem to have been dreadfully low."
Dr. Allen noted "evidence" which suggest LNKD may be heading lower. "Institutional investors have sold 9.3% of their holdings over the past three months and insiders have unloaded a huge percentage (68,5%) of their holdings over the past six months (source: Yahoo! Finance). The institutions are surely not always right, but with their superior resources, they are in a better position than any individual to be able to predict what is likely to happen next. And they are selling. So are insiders, and in a big way. What do they know that we don't?," he stated his report.
Join the Conversation